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We don’t need to tell you that in the United States, Americans young and old rely heavily on auto loans, mortgages, and credit cards to pay for their vehicles, homes, and various types of personal belongings. The problem is that in these uncertain economic times, people frequently run into financial trouble and then can’t repay their debts.

Be it a sudden job loss, an illness or death in the family, such financial setbacks can make it impossible for debtors to stay current on their auto loans, home loans, credit cards and other bills. When a debtor cannot repay their debts, the money owed can snowball with no end in sight.

A few thousand dollars owed, quickly turns into tens of thousands, and the debtor is left with two options: financial ruin, or file for bankruptcy and start improving their financial health right away.

According to the U.S. Bankruptcy Courts, bankruptcy “helps people who can no longer pay their debts get a fresh start.” The bankruptcy laws also “protect financially troubled businesses.” This is so true, and we can attest to the fact that bankruptcy can help struggling individuals, couples and businesses experience the debt relief they need and deserve.

What does bankruptcy do?

Personal bankruptcy (Chapter 7 and Chapter 13) allows individuals and couples to erase, discard or otherwise wipe out debt, or it can help people by creating a realistic plan where they can repay debts.

Usually, bankruptcy cases are started after the debtor hires a bankruptcy attorney, who files the bankruptcy petition with the bankruptcy court.

Individuals can file bankruptcy petitions, or married couples can file them together, or a business can file bankruptcy. Bankruptcy cases are not handled on the state level. Instead, they are filed in the federal courts; these rules are explained in the U.S. Bankruptcy Code.

There are several different types of bankruptcies, including:

  • Chapter 7 is for individuals with little to no assets and a low income.
  • Chapter 13 is for individuals with a steady source of regular income.
  • Chapter 11 bankruptcy is filed by businesses to reorganize their debts.
  • Chapter 7 may be filed by a business to liquidate assets.
  • Chapter 12 bankruptcy is reserved for family farmers and fisherman.
  • Chapter 9 is filed by municipalities, such as cities, villages, and towns.
  • Chapter 15 is filed by parties from more than one country.

If you are considering filing bankruptcy, the Bankruptcy Courts strongly recommend that you seek the advice of a qualified bankruptcy attorney and we couldn’t agree more.

Filing for bankruptcy is a big, yet important step for debtors, and we can help you make the best decision for you by explaining the advantages as well as the legal consequences of filing.

For the legal advice you need, contact our Harrisburg and York bankruptcy attorneys for a free, in-depth consultation. Call (717) 219-2881 today!

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For a thorough explanation on how we may assist you alleviate you financial distress, request a free case consultation by filling out the form below. We have offices in York, Carlisle and Chambersburg.